President Donald Trump is not backing off from his 'squabble' with China over trade, regardless of the toll the dispute takes on the stock market and the U.S. economy.

Trump believes that he will be victorious and his tariffs on Chinese goods, which he raised to 25 percent last Friday, are putting the squeeze on Beijing, he's signaled publicly and to his allies.

'I think it's going to turn out extremely well. We're at a very strong position. We are the piggy bank that everybody likes to take advantage of, or take from. And we can't let that happen anymore,' he said Tuesday on South Lawn as he left the White House.

President Donald Trump is not backing off from his 'squabble' with China over trade, regardless of the toll the dispute takes on the stock market and the U.S. economy

China then warned in state media that the nation that currently has the world's second-largest economy will overtake the United States financially.

'The U.S. side fights because of its greed and arrogance,' a column published in the Global Times claimed.

Trump is trying to smoke the Chinese out after a deal he says was nearly finished fell apart last week. The U.S. president claims the Chinese backed out after they assessed they could get a better deal in another administration.

He responded with a tariff hike on $200 billion of goods and a threat to put to put penalties on $325 billion of other items, essentially promising blanket tariffs on Chinese products of 25 percent.

The Chinese say they will not be bullied into taking a deal that hurts them too much financially, and even the president's allies are worried he's taking the argument too far.

'I don't like directionally where it's going,' Anthony Scaramucci, a major hedge fund investor told the Washington Post of the trade fight. 'The economy is still very strong. It's not clear to me it will fully derail the economic story. But it could put a dent in the stock and bond market.'

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'It’s a high-risk strategy, but it’s not in his personality to back down. This goes back to what he said that first time he came down the escalator at Trump Tower,' he said.

In the Global News column that Xinhua News Agency reprinted, Beijing warned Trump that he's in for a long slog.

'Washington originally hoped to finish [the trade war] quickly, and did not prepare to fight a long-lasting war psychologically. Now it is mobilizing [its team] last minute with baffling words that do not hold water,' said the article said. 'China is not a small country and does not earn our daily bread from U.S. only.'

The piece claimed, 'Particularly in today's world, the Chinese market is huge and very close to the U.S. market in size, and the trend is [we] will overtake the U.S.'

Wednesday the the U.S. stock market immediately lost 150 points in the Dow Jones Industrial Average at its open, after closing the day before at roughly the same point it did the day before.

The day prior it suffered a major sell-off, however, after Trump insisted he's willing to wait the Chinese out and hit them with additional tariffs.

'We’re having a little squabble with China because we’ve been treated very unfairly for many, many decades — for, actually, a long time. And it should have been handled a long time ago, and it wasn’t. And we’ll handle it now,' he said on Tuesday morning.

China warned in state media that the nation that currently has the world's second-largest economy will overtake the United States financially

On Wednesday the the U.S. stock market immediately lost 150 points in the Dow Jones Industrial Average at its open

He said that the U.S. is a 'strong position' economically, unlike China, and he can afford to wait.

'They want to make a deal. It could absolutely happen. But, in the meantime, a lot of money is being made by the United States, and a lot of strength is being shown,' he claimed. 'Our economy is fantastic; theirs is not so good. We’ve gone up trillions and trillions of dollars since the election; they’ve gone way down since my election.'

In the meantime, Beijing has put retaliatory tariffs on $60 billion in U.S. goods.

The stock market had started to rebound before the new Chinese tariffs were announced, even as Vice Premier Liu He left Washington empty-handed.

But over the weekend, the president changed his tone, boasting that China 'felt they were being beaten so badly in the recent negotiation that they may as well wait around for the next election, 2020, to see if they could get lucky & have a Democrat win - in which case they would continue to rip-off the USA for $500 Billion a year.'

'We are right where we want to be with China,' he insisted in a Sunday tweet. 'Remember, they broke the deal with us & tried to renegotiate. We will be taking in Tens of Billions of Dollars in Tariffs from China. Buyers of product can make it themselves in the USA (ideal), or buy it from non-Tariffed countries.'

Shareholders didn't seem to agree. The Dow took a more than 600-point dive on Monday and continued to fall on Wednesday, putting it at its lowest point since Feb. 11.

Asked on Fox News Sunday about the status of talks and the president's claims that China is waiting for former Vice President Joe Biden or some other Democrat to be elected president, National Economic Council head Larry Kudlow explained, 'We think sometimes China may be misinterpreting the U.S. politics.'

T he Dow took a more than 600-point dive on Monday and continued to fall on Wednesday, putting it at its lowest point since Feb. 11

Kudlow said the U.S. Trade Representative's office had already begun the process to impose new tariffs on Beijing, just as Trump had promised. It could be a 'couple of months' before those are ready to go, he acknowledged.

He also admitted that U.S. consumers will be affected by tariff hikes, in contrast to what President Trump has claimed.

'Both sides will pay in these things,' he said. 'But the Chinese will suffer GDP losses and so forth with respect to a diminishing export market and goods.'

Trump argued again on Monday that American consumers will not have to foot the bill, however, and every sector will be better off when the dispute with China comes to an end.

'I think we’re winning it. We’re going to be collecting over $100 billion in tariffs. Our people, if they want, they can buy from someplace else, other than China. Or they can — really, the ideal is make their product in the USA. That’s what I really want. Yeah, we’re winning it,' he contended. 'You know what? You want to know something? You want to know something? We always win. We always win.'

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Trump will NOT back down on his China trade war telling aides his base loves the fight